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Michael Saylor, CEO of MicroStrategy, speaks at the Bitcoin 2021 Convention. (Photo courtesy of Getty/Joe Raedle… [+] Images)
courtesy of Getty Images
In July of last year, MicroStrategy announced that it would invest some of its cash and future cash flow in alternative assets such as stocks, bonds, commodities, and digital assets such as bitcoin. It had a market capitalization of $1.15 billion at the time, $421 million in cash on hand, and planned to invest $250 million of that in alternative assets. What has happened is that a firm has not only spent cash it has made, but has also taken on over $2 billion in debt in order to purchase over 100,000 bitcoins for over $2.7 billion. The company’s market capitalization has risen from $1.15 billion on June 30, 2017 to $6.5 billion a year later. The following is a rundown of MicroStrategy’s recent announcements and stock values.

StockCharts.com’s MicroStrategy price chart

It began in July 2020.
MicroStrategy announced a new capital allocation plan when company presented its June 2020 quarter results on July 28. It stated: “MicroStrategy plans to return up to $250 million to its shareholders over the next 12 months, with more than $500 million in cash and cash equivalents, as well as short-term investments, and an operating plan that predicts considerable free cash flow going forward. MicroStrategy will also attempt to invest up to $250 million in one or more alternative investments or assets over the next 12 months as part of its capital allocation plan, which might include stocks, bonds, commodities such as gold, digital assets such as bitcoin, or other asset types. The success of each of these tactics will be determined by market conditions.”
Bitcoin pricing and MicroStrategy:
$117.66 on July 27, 2020 $10,990 in Bitcoin
$117.81 on July 28, 2020 $10,912 in Bitcoin
$122.74 on July 29, 2020 $11,100 in Bitcoin

ADDITIONAL INFORMATION FOR YOU
Bitcoin as a Primary Reserve Asset for the Treasury
The firm declared on August 11, 2020 that it has purchased 21,454 bitcoins for a total price of $250 million, including fees and expenses. The price of a bitcoin was $11,653 at the time.
Bitcoin pricing and MicroStrategy:
$123.62 on August 10, 2020 $11,878 in Bitcoin
$134.89 on August 11, 2020 $11,410 in Bitcoin
$137.04 on August 12, 2020 $11,584 in Bitcoin

The initial aim of $250 million was surpassed.
MicroStrategy revealed on October 27, 2020 that it has purchased $425 million worth of bitcoins in the September quarter. Michael Saylor, CEO of MicroStrategy, stated, “The latest example of MicroStrategy’s embracing of virtual technology is our recent decision to make bitcoin our principal treasury reserve asset. The purchase of $425 million in bitcoin during the quarter provides investors with a higher return potential than maintaining similar sums in cash and has boosted MicroStrategy’s overall market visibility.”
The company spent $11,111 for bitcoins that were underwater as of September 30, but bitcoin recovered and the company’s assets were in the black by October 27.
Prices for MicroStrategy and bitcoin on October 26, 2020 are $175.00. October 27, 2020: $175.58 Bitcoin: $13,075 $13,654 in Bitcoin
$162.15 on October 28, 2020 $13,271 in Bitcoin

2/25/21 MicroStrategy purchases bitcoin valued more than $1 billion. STRF/STAR MAX/IPx 2021 STRF/STAR MAX/IPx 2021 STRF/STAR MAX/IPx 2021 STRF/STAR MAX/IPx 2021 STRF/STAR MAX/IPx
To buy bitcoin, you’ll need convertible debt.
The corporation announced on December 7, 2020 that it planned to issue $400 million in convertible debt to fund the purchase of bitcoins. It stated four days later that it had raised $650 million in debt due in 2025 with a 0.75 percent interest rate and an initial conversion rate of $397.99 per share.
Bitcoin pricing and MicroStrategy:
$336.22 on December 7, 2020 $19,191 in Bitcoin
$289.45 on December 8, 2020 $18,321 in Bitcoin
$286.21 on December 9, 2020 $$$$$$$$$$$$$$$$$$$
$290.33 on December 10, 2020 $18,264 in Bitcoin
$285.92 on December 11, 2020 $18,058 in Bitcoin

Bitcoin has surpassed $1 billion in value.
The business reported on December 21, 2020, that “In accordance with its Treasury Reserve Policy, it has purchased an additional approximately 29,646 bitcoins for about $650 million in cash, at an average price of approximately $21,925 per bitcoin, inclusive of fees and expenses. The Company owns about 70,470 bitcoins as of December 21, 2020, which were purchased for an aggregate purchase price of roughly $1.125 billion and an average purchase price of approximately $15,964 per bitcoin, including fees and expenditures.”
Prices for MicroStrategy and bitcoin on December 20, 2020 are $301.20 and $23,477, respectively.
$317.60 on December 21, 2020 $22,803 in Bitcoin
Bitcoin: $23,783 on December 22, 2020: $331.50

Metallic Getty’s Bitcoin sign on a financial chart
It made a one-hundred percent profit on bitcoins.
The company stated in its December quarter results, which were released on January 28 of this year, that “We intend to keep our bitcoin and invest any additional excess cash flows in the cryptocurrency. As part of our general corporate strategy, we’ll also look into different ways to acquire more bitcoin.”
This was most likely due to MicroStrategy’s purchase of bitcoins doubling in value. It cost an average of $15,964 to buy 70,784 bitcoins as of December 31, 2020. As you can see in the graph below, bitcoin was over $30,000 when the company revealed its results.
Bitcoin pricing and MicroStrategy:
$540.10 on January 27, 2021 $30,432 in Bitcoin
$578.38 on January 28, 2021 $31,649 in Bitcoin
$617.31 on January 29, 2021 $34,316 in Bitcoin

Over $1 billion was raised to purchase bitcoins.
The company stated on February 16 that it planned to raise $600 million in a convertible offering. It stated three days later that it had raised $1.05 billion in debt due in 2027 at a conversion price of $1,432.46 per share.
Bitcoin pricing and MicroStrategy:
$955.00 on February 16, 2021 $49,199 (Bitcoin)
$941.80 on February 17, 2020 Bitcoin: $52,149
$927.78 on February 18, 2021 $51,679 in Bitcoin
$963.72 on February 19, 2021 $55,888 in Bitcoin

Chart of the Bitcoin Price
StockCharts.com
More than $1 billion is paid for more bitcoins.
The firm claimed on February 24 that it had spent the money it had just raised, exchanging $1.026 billion for 19,452 bitcoins. This amounted to $52,765 per bitcoin, bringing the total to 90,351 bitcoins valued at $2.171 billion.
MicroStrategy’s CEO, Michael J. Saylor, stated, “The company currently owns over 90,000 bitcoins, supporting our confidence that bitcoin, as the world’s most commonly used cryptocurrency, can be trusted as a store of wealth. We will continue to follow our strategy of buying bitcoin with surplus cash, and we may issue debt or equity securities in capital raising activities from time to time, depending on market conditions, with the goal of using the proceeds to buy more bitcoin.”
Bitcoin pricing and MicroStrategy:
$691.23 on February 23, 2021 $48,824 in Bitcoin
Bitcoin: $49,705 on February 24, 2021: $817.69
Bitcoin: $47,093 on February 25, 2021: $731.61

Debt of $500 million is issued.
The corporation declared on June 14 that it has taken on $500 million in debt with a 6.125 percent interest rate due in 2028. “MicroStrategy intends to use the net proceeds from the sale of the notes to buy further bitcoin,” according to the press release.
Bitcoin and MicroStrategy pricing on June 13, 2021: $516.44 $39,097 in Bitcoin
$598.49 on June 14, 2021 $40,218 in Bitcoin
$630.54 on June 15, 2021 $40,406 (Bitcoin)

Has a total of 105,000 bitcoins.
MicroStrategy said on June 21 that it had purchased 13,005 bitcoins for $489 million, or $37,617 per bitcoin, as bitcoin’s price declined. At an average purchase price of $26,080, this provided the corporation around 105,085 bitcoins.
Bitcoin pricing and MicroStrategy:
$646.46 on June 20, 2021 $35,698 (Bitcoin)
$583.67 on June 21, 2021 $31,676 in Bitcoin
$553.72 on June 22, 2021 $32,505 in Bitcoin/nRead More

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